Investors demanded a higher premium to hold French government bonds as concerns over the country’s fiscal outlook weighed on the market. The spread between 10-year French and German yields, a closely watched gauge of perceived credit risk in the euro area, widened six basis points to 159.4 basis points, the widest level in 15 years. It’s risen sharply since late September amid worries over France’s debt burden and the government’s ability to pass a budget.
The move also came against a backdrop of higher energy prices. Benchmark European natural gas futures climbed around 4%, while Brent traded above $110 a barrel. Yields on French 10-year bonds rose to 5% for the first time since 2002.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing